Hiring Retainers for Regular Work: Can They Claim Permanent Employment After 240 Days?

Can we hire 'Retainers' for regular (non-specialized) work in the organization and keep them employed for a long duration? What are the legal issues involved here? Can they claim permanency of the job? We are considering engaging retainers (in hundreds) with a similar educational background/profile who are otherwise employed as full-time employees.

Retainers are just like consultants. They can be employed/retained for a short period or for a longer period. They can either work from your office or from their own premises. They also have the right to work for other organizations simultaneously.

My question was: Can they claim permanency of employment after crossing the mandated 240 days of association?

Dear,

They cannot claim permanency, but mind that you have to deduct their TDS, which is around 10.2% of their retainership fee, and they have to raise their monthly bill. You cannot hire retainers for operating your machines. There is no benefit in taking seniors on retainership. However, as you want to hire in hundreds, I feel you may be inclined towards some unfair labor practices. What type of job do you wish to assign to them?

Thank you.
J S Malik

Retainership is as good as being a consultant. There is no binding for permanency, but it can be renewed based on performance, and all clauses should be incorporated into the agreement.

CC

When you talk about numbers in hundreds, it is permanent in nature and calls for regular employment. You can opt for an alternative employment of temporary staff based on your job orders. For this type of employment, you can issue appointment orders mentioning the job order number and terminate the employment within the stipulated period. They cannot claim permanent employment.

Furthermore, this condition must be included in your certified standing orders. Otherwise, I strongly feel that you are practicing unfair labor practices.

You can have retainers and deduct professional tax from their compensation at the rate of 10.2% flat. In case you add an exclusivity clause in the contract, then they will not be allowed to work anywhere else. They cannot claim permanent employment ever unless specified in the contract.

Please write back for any clarifications!

Thanks

Dear,

The test is control. If the retainer person was working independently and you had no control over him, i.e., by supervision, he is a genuine retainer; if not, it is a sham arrangement, and he can claim to be a direct hire.

With Regards,

V. Sounder Rajan

E-mail: rajanassociates@eth.net

Retainers are generally employed on an agreement for a particular period. In case they are required for a longer period, it should be renewed year-wise with fresh agreements. All the required terms and conditions are incorporated into the agreement and are valid for that particular period only. No retainers can claim permanency of employment since the agreement is for a specific period only.

One more point is that retainers never take any risk of the organization (just like appointed advocates for court cases); all the risks generally rest with the employer. Therefore, it is not advisable to entrust internal responsible jobs to the retainers.

Dear Friend,

When you hire a person as a retainer and pay him a monthly retainership fee, you are not employing him on a regular basis. He is being paid a fee so that you have the right to ask him to do a job (jobs as per the agreement with him) as and when the requirement arises. Normally, a retainership agreement has two types of payments - one retainership fee and the other visitation charges on a daily, weekly, or monthly basis.

As for the issue of 240 days of service, it is an altogether different proposition. If you employ a person on regular wages directly, and he completes 240 days of service, then he would be deemed to have completed one year of regular service. In such a situation, the provisions of the ID Act 1947 for retrenchment will be attracted when you want to discontinue his employment.

I am a retainer for three firms presently. I receive a monthly retainership fee and visitation charges on a daily basis when the firms call me to do work for them.

P. K. Misra

Hi,

Please could you forward me a contract letter for retainership. I want to add the following points to the letter: the person will be on a call basis, required for discussions with existing and potential clients, and might have to travel anywhere in India.

Please forward the same to [https://www.citehr.com/misc.php?do=email_dev&email=bmFpbmEubGl0dGxlZ2 lybEBnbWFpbC5jb20=](https://www.citehr.com/misc.php?do=email_dev&email=bmFpbmEubGl0dGxlZ2 lybEBnbWFpbC5jb20=).

Thanks,

Shweta

Dear All,

My question is this: if an employee crosses 58 years of age and our appointment letter states retirement, can we still use a retainership agreement to retain the services of a senior employee? Is this legally right or wrong?

Regards,
Hari Nagvanshi

Hi Hari,

Taking the services of some persons on a retainer agreement is legally right. Even in some cases, government establishments are also practicing this. Some specially talented and experienced individuals are considered as golden-egg laying hens, hence they are employed even into their 70s. Sometimes, in private organizations, at the discretion of top managers or directors, some people are employed on humanitarian grounds after the age of 58.

Regards

Is it legally correct or appropriate from an HR perspective to sign an employment contract on a retainership basis without any retainership agreement or fees, relying solely on a commission that is not distinctly defined (as it may vary from project to project based on project cost)? Can this type of job be formalized by signing just a two-page letter mainly containing NDA terms?

Moreover, can such a job be defined for a limited period? What if the commissions are not paid as mentioned in the letter (percentage not distinctly defined), with some false or unjustified reasons given after availing services (which may include critical initiation or introduction leading to the finalization of any deal)?

Appreciate your advice at the earliest.

Thanks,

Partha